Oscar Gruss Plans to Hand Brokerage to Tel Aviv Employees

By Zeke Faux -
Jan 2, 2013

Oscar Gruss & Son Inc., the New York
brokerage that traces its origins to Poland almost a century
ago, will sell itself for a “nominal” price to two employees
as trading slows, Chief Executive Officer Michael Shaoul said.

Shaoul, 46, will step down as head of the business, which
employs about 30, if regulators approve the sale, he said
yesterday in an interview. He’ll continue to run Marketfield
Asset Management LLC, a New York-based money manager with about
$4.5 billion in assets. Shaoul declined to specify the price
being paid by Ronen Cohen and Avi Avital, who work in Tel Aviv.

The deal enables Oscar Gruss to continue trading stocks in
the U.S. and Israel after Shaoul said in October that it had to
close its merger-arbitrage unit as business waned. Other small
brokerages including ThinkEquity LLC, Rodman & Renshaw LLC and
WJB Capital Group Inc. shut their doors last year.

“We have managed to survive and hopefully the firm has a
few decades more ahead of it,” Shaoul said. “When I look at
how bad things got in the summer for small firms, that looks
like a bottom for me.”

Oscar Gruss reversed its plan to shut the merger-arbitrage
desk as the deal progressed, Shaoul said. The firm hired Barry Kaplan from Rochdale Securities LLC in November after that
brokerage’s capital was depleted by an unauthorized $1 billion
trade in Apple Inc. stock.

Middlemen who help match buyers and sellers on Wall Street
are finding it harder to earn commissions as money managers
trade fewer securities, execute more transactions electronically
and cut the amount of research they purchase. Shaoul said he
wasn’t able to find another brokerage to buy the business.

“We couldn’t get anybody to look at it because nobody
wanted to add headcount, even headcount with demonstrable
commissions sitting behind it,” he said.

Oscar Gruss, who founded a currency-trading firm in Lvov,
Poland in 1918, fled to the U.S. during World War II and opened
a brokerage in New York with his son Emanuel, according to the
company’s website.